News and Insights

Share this Article

2018 Nov 08

Waha Capital nine-month net profit rises 10.20 % to AED 295.1 million

Waha Capital nine-month net profit rises 10.20 % to

AED 295.1 million

ABU DHABI, 08 November 2018 – Waha Capital PJSC, a leading investment company in Abu Dhabi (ADX: WAHA), has reported a 10.2 percent rise in net profit to AED 295.1 million in the first nine months of 2018, largely driven by the company’s Private Investments business.

FINANCIAL HIGHLIGHTS

Nine-month period ended 30 September 2018

Net profit of AED 295.1 million, up 10.2% YoY

Total income of AED 812.2 million, in line with the same period last year

Return on Average Equity8.7%

Total assets AED 12.35 billion

Q3 2018 Financial Highlights

Net profit of AED 55.4 million, down 34.6% YoY

Total income of AED 199.4 million, down 24.9% YoY

The company’s Private Investments business recorded a net profit of AED 309.2 million in the nine-month period, an increase of 16.9 percent from the previous year. The business benefited from a continued robust contribution from its stake in New York-listed AerCap Holdings NV, as well as a gain of AED 64.1 million from the sale of 6.68 million AerCap shares following their expiration from a collar hedging and financing arrangement.

Waha Capital’s Asset Management business, which manages emerging market fixed income and equity funds, recorded a net profit of AED 138.8 million in the nine-month period. The funds, which have consistently outperformed key indices over several years, were impacted in the third quarter by volatility in global capital markets.

H.E. Salem Rashid Al Noaimi, Chairman of Waha Capital, said: “Waha Capital continues to build on its track record of profitability, again delivering a strong return on equity. In a year when macro-economic conditions have been difficult, and global capital markets are extremely volatile, the company is benefiting from our long-standing strategy of diversification. We are confident that our robust business is positioned for growth, with our Private Investments team working on opportunities to expand our portfolio, and Asset Management attracting third-party investors to our funds.”

Michael Raynes, CEO of Waha Capital said: “Our Private Investments business continues to grow through a strategy of investing in high potential companies in our areas of expertise, including energy, financial technology and financial services. Our recent acquisition of a stake in Petronash, a highly innovative oil and gas services company, is in line with this targeted approach, and we will pursue other similar opportunities. Meanwhile, the Asset Management business has an outstanding multi-year track record of outperformance, and we are gaining traction in the marketing of our funds. Thanks to our strong balance sheet, liquidity and cashflows, Waha Capital is able to navigate difficult conditions, to consistently deliver attractive returns through market cycles.”

On 6th August 2018, Waha Capital, along with co-investors, entered into a conditional subscription agreement to acquire a 35% stake in Dubai-based Petronash. The transaction closed on 10th October 2018 which includes options, pursuant to which Waha Capital can increase its ownership up to 50% in Petronash.

AerCap

During the nine-month period, Waha Capital disposed 6.68 million shares equivalent to 4.55 percent stake in AerCap for a consideration of AED 1,333.1 million, resulting in the recognition of a gain on disposal of AED 64.1 million. Consequently, Waha Capital’s stake in AerCap reduced from 17.55 percent to 13.00 percent. Further, during the period, AerCap carried out a share buyback program, which Waha Capital did not participate in, which as a result increased Waha Capital’s stake in the company to 13.72 percent from 13.00 percent.

NESR

During the nine-month period, the Waha Capital acquired a 5.8% stake in a NASDAQ-listed entity National Energy Services Reunited Corp. (NESR) as part of its exit of NPS Holdings Limited. During the period, Waha Capital recognized a gain on disposal of AED 92.1 million and a total consideration of AED 312.3 million, comprising cash consideration of AED 130.6 million and a 5.8 percent equity stake in NESR. Waha Capital recorded mark-to-market income of AED 23.1 million on its 5.8 percent stake in NESR.

ASSET MANAGEMENT HIGHLIGHTS

The Asset Management business generated a net profit of AED 138.8 million during the nine-month period ended 30 September 2018, compared to AED 160.1 million during the corresponding period in 2017.

The year-to-date returns of the funds, attributable to owners, as of the end of September was 9.58 percent for the MENA Equity Fund; and 10.13 percent for the CEEMEA Credit Fund. This performance took place in the context of a challenging backdrop for emerging market assets globally.

Waha Capital made some key hires to strengthen its global fund raising capabilities, and as a result, total assets under management reached AED 2.6 billion as of 30 September2018, compared to AED 1.9 billion a year earlier, an increase of 37 percent. The company’s investor base includes a diverse mix of regional and international institutions.

This year, the CEEMEA Fixed Income Fund was named ‘’Best Fixed Income Fund’’ by the Banker Middle East, and the MENA Equity Fund was chosen ‘’Asset Manager of the year 2018 - UAE & Best Absolute Return Fund since inception’’ by Wealth & Finance Alternative Investment.

BALANCE SHEET HIGHLIGHTS

Waha Capital’s assets stood at AED 12.35 billion as at the end of September, up from AED 11.35 billion at the end of 2017, including AED 871 million of cash and cash equivalents. Leverage stood at 28.9 percent at the end of September 2018.